Semiconductor specialists Marvell Technology Inc. and Synopsys Inc. today posted quarterly revenue numbers that topped analyst expectations.

The two companies also raised their guidance. Both attributed the increase to growing demand from artificial intelligence data center builders. That’s a positive signal for the broader chip market, where Marvell and Synopsys play important roles. Nevertheless, the companies’ stocks closed 4.6% and 1.6% lower, respectively.

Marvell’s first-quarter adjusted profit of 80 cents per share was in line with analyst expectations. Its revenue climbed 28% on a year-over-year basis, to $2.41 billion. That’s $18 million more than what the company had projected and a hair above the consensus estimate. 

One of the main contributors to Marvell’s better-than-expected sales growth was its optical networking business. The unit makes digital signal processors, chips that turn electrical data into light that can be transmitted over fiber-optic links. Marvell also makes switches that can coordinate the traffic flowing through those links. Optical networking equipment is widely used in AI clusters because it’s faster than traditional copper wiring.

The company has a chip design arm that develops custom processors for customers. Last year, it announced plans to let clients commission chips equipped with co-packaged optics, or CPO, technology. CPO devices can significantly reduce the cost of building fiber-optic networks for AI clusters.

Marvell expects optical equipment demand to grow at a brisk pace for the foreseeable future. As a result, the company has significantly raised its revenue guidance for the current fiscal year. The company is now projecting annual sales of $11.5 billion, which would represent a 40% increase. Analysts had expected $11 billion.

“This improved outlook is being driven by strong demand across a broad set of Marvell solutions, including 800G and 1.6T scale-out optics, 51.2T Ethernet scale-out switches, scale-up optical solutions for NPO and CPO applications, scale-across datacenter interconnect modules, and custom XPU and XPU-attach solutions,” said Chief Executive Officer Matt Murphy.

Synopsys, a major provider of chip design software, is also benefiting from the AI boom. The company posted sales of $2.27 billion instead of the $2.25 billion that analysts were expecting, which represents a 42% year-over-year jump.

It sells its flagship suite of chip design applications alongside pre-packaged semiconductor designs. Additionally, it competes in the broader engineering software market through its Ansys subsidiary. The unit’s software can be used to design a wide variety of products ranging from car engines to quantum computers.

Synopsys’ top-line growth lifted its earnings. The company generated an $643.7 million adjusted profit in the second quarter of its 2026 fiscal year, which translated to $3.35 per share. Analysts had expected $3.17 per share. 

 “AI is scaling semiconductor demand, architectural diversity and complexity of chips and the systems they power – driving demand across our portfolio,” said CEO Sassine Ghazi. “Our momentum, leadership roadmap, and deep customer engagements are a strong foundation for sustained growth and margin expansion.”

The company has raised its full-year earnings target to $14.76 per share. According to Synopsys, the increase is expected to come from cost reductions and “synergies” related to its Ansys unit. The software maker also boosted its full-year revenue guidance to $9.66 billion at the midpoint.

Photo: Marvell